U.S. inflation print may light a fire under markets

Roni Green from GF Asset Management discusses the change in markets as interest rate cuts are priced out. Roni predicts that tonight's US inflation numbers will continue to decline and that CPI remains in a downward trends. He sees a potential chance for lower yields, which may underpin a rally in bonds. Driven by a robust job market in the US, Roni identifies the Federal Reserve funds market as a significant factor in undercutting the March pricing for an interest rate increase.

The RBNZ potential for another two rate hike has raised some concerns that inflation was prove to be more stubborn. He considers a prolonged period to reduce rates due to inflation challenges among central banks though argues the specifics of a smaller economy like New Zealand.

Roni finally discusses the implications of a small uprising in credit spreads for bond markets. He anticipates a weakening in the data for the remainder of the year and possibly up to three or four cuts from the Federal Reserve. He observes that though market trends are towards bond issuances, they are proceeding cautiously and veering towards long-term yields. Furthermore, Roni expects potentially negative retail sales in the US due to seasonal factors.